Wednesday, February 17, 2021

Daily Market Report 2/17/21 Retail Sales spiked to 5.3% in January, after a 1.0% decline in December.  Inflation for the Wholesale Sector spiked in January too, as the Producer Price Index indicated a 1.3% increase in MoM report in January; and it's Core PPI jumped Up 1.2%, bringing it's YoY Up from 1.2% to 2.0% in January.  This could be a result of pent up demand, as December saw a spike in cases and many states renewed more lockdowns.  Meanwhile, Industrial Productions rose by 0.9% in January.  The NAHB Home Builders Index, which measures Home Builders confidence, slightly rose in February, as it stepped up from 83 to 84.  Lastly, the Business Inventories increased by 0.6% in December.  Stocks are in Negative Territory, as Yields spike to 1.30%.  Investors are digesting the ramifications of higher inflation data.  As such, MBS had a big selloff yesterday (closing Down 70bps); but has regained a small portion of that, as it's currently Up 13bps.  It's a slight improvement from it's close yesterday, but still well off from yesterday's open.  Yields have subsided some this morning; and are now down to just under 1.28%.  Investors are viewing these spikes as too much, too fast; and the Markets are digesting the information and re-evaluating their positions.

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